World Grain - November 2009 - 6

from the editor-in-chief

Mobile phones promise new
markets for flour foods

egardless of the part of the world where
the question may be posed, a common
issue facing grain-based foods executives is how best to gain understanding of the
forces that are likely to maintain and even
expand demand.
In the developed nations, the focus is
usually on new product development and
marketing combined with factors in the
overall economy that influence consumer
spending and attitudes. In the developing
world, where the largest part of the global
population resides, emphasis is often placed
on measuring personal income trends. After all, many billions living in developing
countries are too poor to participate in a
functioning economy that offers growth to
grain-based foods. Thus, the prospect for
this situation changing any time soon has
huge relevance to the future of an industry
like grain-based foods.
As tempting as it may be to dismiss any
hope for improving the lot of the global poor,
in the wake of all the development disappointments of the past, one avenue suddenly
promises success. This is mobile telephone
service which allows the poorest countries
to bypass an essential stage of development that had seemed beyond the reach of
most of these nations. Due to the reach of
modern wireless communications services,
it is no longer necessary for these nations
to come up with national mail services and
land-based communications networks. For

WOR LDGRAIl9.
Chairman
Charles Sosland
Publisher/Managing Director Mark Cornwell
Director of Advertising Sales
Dan Flavin
EDITORIAL STAFF
Editor-in-Chief
Editor
Managing Editor,
World-Grain.com Editor
Markets
European Editor
Designer

Morton I. Sosland
Arvin Donley
Meyer Sosland
Melissa Alexander
Chris Lyddon
Ryan Alcantara

investments far less costly than previously
required to achieve that goal, developing
countries have the chance to put in place the
path to industrialization. The result should
be expanding employment and the cultivation of a market-based economy stemming
from this new knowledge and communications capacity.
"In less than a generation," the International Monetary Fund (IMF) recently declared, "mobile telephony has transformed
agriculture, marketing, fisheries, freight
logistics, irrigation, banking and small business in the developing world." Each of these
elements has an important role in the development of grain-based foods demand. Without assigning more weight to one than another, it is especially striking to understand
what it means for these "backward" nations
to have freight logistics systems in place that
change primitive unreliability into a rational,
efficient system.
According to IMF, it is likely that mobile
telephony will have its greatest positive multiplier effect through mobile banking. This
means incorporating the telephone into a
formal financial system, using technology
currently available in developed countries to
make the phone a point-of-sale device and a
source of cash. This convergence of banking
and telephone technology offers massive opportunities for building businesses and spurring economic growth that would certainly
have equal repercussions on demand for

grain-based foods as well as overall economic growth. More than 1 billion people have
a mobile phone but no bank account, and it
has been estimated that nearly half of these
are eager to have a banking relationship. In
countries like Kenya, where such a financial
system has been in place, the speed, ease of
access and safety of this approach combine
to make it a good way of doing business, including for the purchase of food. Retail merchants, who frequently are marketers of food
amid a variety of merchandise, are essential
participants in mobile banking.
Agreeing that information and communications are growth promoters makes mobile
telephony especially important to rural areas
where half of the world's population and
75% of the poor now reside. Important here
is the declining cost of installing and operating such systems, which in turn make it possible to reach rural people with low incomes
and low literacy.
"The next billion mobile subscribers will
consist mainly of the rural poor," says the
IMF. It also may be said that the next billion
consumers of grain-based foods provided
through a commercial market system will
also be drawn from the rural poor, whose
promise makes an exciting dynamic to the
development of new markets and new demands where very little existed before.

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WORLD GRAIN (ISSN 0745-8991) Volume 27, issue 11,
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Morton I. Sosland
Editor-in-chief

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World Grain - November 2009

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